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July 9, 2020 logo logo
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[Official Guidance]

Updated Operational Compliance List from IRS, for Plan Qualification Requirements Effective in 2020

"The Operational Compliance List is provided per Rev. Proc. 2016-37 ... to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements effective during a calendar year.

Internal Revenue Service [IRS]


ftwProposal Pro - Illustrate and Propose the Best Plan Options

ftwProposal Pro helps you illustrate the best plan options. Intuitive and easy to use - the compare features, customization options, ability to run complex calculations and create 3-5 separate proposals simultaneously saves you time! Learn more! Learn more

Sponsored by Wolters Kluwer

[Guidance Overview]

Editor's Pick Satisfying Employee Benefit Plan Disclosure, Notice and Election Requirements During a Pandemic and Beyond

"The Internal Revenue Code and [ERISA] set forth numerous disclosure, notice and election requirements for employee benefit plans. These communications can involve thousands of pages per year, per participant, and be very expensive if they must be printed on paper and mailed. Few participants really want all that paper.... Pre-COVID-19 guidance regarding electronic media ... IRS Notice 2020-42: COVID-19 Temporary Guidance Regarding Electronic Elections ... EBSA Disaster Relief Notice 2020-01 ... DOL safe harbor for electronic media for retirement plans ... Deciding whether to adopt the DOL 2020 safe harbor for retirement plans."


[Guidance Overview]

A Guidebook to CARES Act Relief: Notice 2020-50 Provides Additional Clarity and Relief for Employers and Employees

"Expansion of the definition of 'Qualified Individual' ... Clarification of amounts available for a CV distribution ... Guidance relating to amount that may be distributed and reliance on self-certification for CV distributions ... Guidance on tax reporting and re-contribution of CV distributions ... Guidance regarding CV loans ... Amendment deadline."

Seyfarth Shaw LLP

[Guidance Overview]

Editor's Pick Key Points About the DOL's New Fiduciary Rule

"The trigger for the application of the proposed exemption is that the investment advice fiduciary is already a regulated entity in the form of an RIA, registered broker dealer, bank or insurance company and their employees, agents and representatives. Apparently, a 'country squire' who is not associated with one of these entities cannot avail themselves of the exemption.... All five prongs of the five-part test must apply for a financial institution or investment professional to be an investment advice fiduciary when making a rollover recommendation."

Troutman Sanders

[Guidance Overview]

DOL Issues Fiduciary Rules on Plan Investments

"The Technical Amendment ... returns the applicable regulations and prohibited transaction exemptions back to where they were prior to the 2016 Rule. The Technical Amendment also clarifies and confirms standards for participant education with respect to investments. It is effective immediately, without any notice and comment period ... [T]he Proposed Exemption prohibits an investment advice fiduciary from receiving a fee for investment advice provided to a Retirement Investor to rollover Plan benefits, unless certain conditions are satisfied.... [T]he Financial Institution would be required to document the reasons that the advice to roll over was in the Retirement Investor's best interest."



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Sponsored by October Three

Plan Sponsor and Service Provider Submit Motions to Dismiss in Response to Data Breach Suit

"Further demonstrating the lack of clarity on who is liable when a plan suffers a data breach, on June 30th, Abbott Laboratories and Alight Solutions, pointed fingers at each other in dueling motions to dismiss a complaint that alleged both were fiduciaries in connection with a plan data breach that stole $245,000 from a participant's plan account. The Northern District of Illinois will now have to decide if, based on the complaint's allegations, either Abbott or Alight (or both) could have [1] fiduciary responsibility with respect to the theft of funds from the participant's account and whether [2] the plan participant has pled a plausible claim of fiduciary breach." [Bartnett v. Abbott Laboratories, No. 20-2127 (N.D. Ill. complaint filed Apr. 3, 2020)]

The Wagner Law Group

Schlichter Makes His Case for Participant Data as Plan Asset

"The plaintiffs in an excessive fee suit have reiterated their argument that participant data is a plan asset -- and that the use of that data for non-retirement plan related purposes constitutes a fiduciary breach." [(Harmon v. Shell Oil Co., No. 20-021 (S.D. Tex., plaintiffs' opposition to motion to dismiss filed Jul. 6, 2020)]

National Association of Plan Advisors [NAPA]

Editor's Pick How and Why to Design Pensions for Full Funding in the Real Word

109 pages. "[F]inancial planners often suggest that retiring workers should aim to replace 70 to 80% of their annual preretirement earnings. Social Security benefits typically replace around 35% of the typical worker's preretirement earnings, and the purpose of this Article is to show how pensions could and should be designed to replace, say, 40% of the typical worker's preretirement earnings throughout her retirement years. In particular, because so many public and private pension plans are underfunded, this Article focuses on how to fully fund those pensions."

Prof. Jonathan Barry Forman, via Marquette Law Review

How the Retirement and Annuity Industries Are Helping Employees Generate Retirement Income

"Considering the complex nature of draw-down strategies and participants' willingness to learn about the subject, recordkeepers should provide resources that help those who want to learn about, model or review their retirement income plans. Income projection tools that provide decumulation analysis can be effective resources for creating draw-down strategies[.]"

Corporate Insight


The DOL's Proposed Fiduciary Rule: Some 'Top of Mind' Thoughts

"[W]hile clearly this is a watered-down version of the previous Fiduciary Rule, it is not so weak as to have no teeth at all. There are a decent number of hoops to jump through to take advantage of the prohibited transaction exemptions, which will likely discourage many bad actors from attempting to exploit participants.... The major negative ... is the fact that the DOL could not think of something better than reverting to a five-part test written in 1975 to determine an investment advice fiduciary."

Cammack Retirement Group

Benefits in General

Arbitration and Class Action Waivers Under ERISA

30 presentation slides. Topics: [1] ERISA framework; [2] Arbitration and class action waivers: recent decisions; and [3] Designing arbitration clauses for ERISA plans.

American Benefits Council

Protecting the Rights of Taxpayers Who Rely on IRS 'Frequently Asked Questions' (FAQs)

"Because FAQs aren't subject to thorough review, Treasury and the IRS may later decide some of them are wrong and change them. That is reasonable. But what about taxpayers who followed an FAQ and now find that: [1] the IRS is taking the opposite position on audit; [2] the IRS is imposing a penalty on the taxpayer for taking the position the FAQ had advised; and [3] the taxpayer can't locate the original FAQ because the IRS has changed it and removed the initial FAQ from its website? ... To protect the rights of taxpayers who follow FAQs, [the Taxpayer Advocate Service makes] the following recommendations: [1] The IRS should continue to use FAQs to provide timely guidance to taxpayers where appropriate.... [2] The IRS should include the versions and dates of each FAQ on its website or create an archive of obsolete or modified FAQs, including applicable dates, so that taxpayers can locate an FAQ that was in effect at the time they filed their returns."

[BenefitsLink note: Pages on the IRS website (and other government sites) are regularly archived by the Wayback Machine; prior versions of FAQs and other documents generally can be found there. The Wayback Machine is maintained by Internet Archive, a 501(c)(3) organization unaffiliated with any government entity.]

Taxpayer Advocate Service, Internal Revenue Service [IRS]

Selected Discussions
on the BenefitsLink Message Boards

► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge.

Individual Has Both Schedule C and Form W-2 Income (Two Different Businesses)

"A client has received both Schedule C income and W-2 income, both of which came from his own businesses (sole proprietorship and an S corp). How can we run the DB calculation in this case? Should I use earned income + W-2 as the compensation basis? What about deductions? How can we break down the contribution among sole proprietorship and S corp?"

BenefitsLink Message Boards

Attaining Non-ERISA 403(b) Status -- Independent Party (Not Employer) Must Handle Basically Everything?

"Seems to me that many non-ERISA plans require employer sign-offs for things like distributions and loans. I read some articles that seem to suggest that the only way to have a non-ERISA plan is for an independent party to sign off on everything. Is that how it works in the real world?"

BenefitsLink Message Boards

Counting FMLA Pay for Purposes of Qualified Plan's Definition of Compensation

"Re the definition of compensation for qualified plan purposes (for a plan that uses W-2 comp) -- As I understand it, absent a specific exclusion in the plan, FMLA wages, even if under a 'special' category for employer Social Security payroll taxes or whatever, would still be considered as wages for purposes of calculating employer match, whatever. Did anything override this?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

What Happens When an Employer Chooses Not to Treat Participants' COVID-Related Distributions as Such?
Robert Toth, via National Tax-Deferred Savings Association [NTSA]

Sponsors and Participants Must Follow 409A True to Form (PDF)
Milliman and White & Case, via Benefits Law Journal, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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